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One of the huge mistakes people make is that they try to force an interest on themselves. If you’re really interested in software and computer science, you should focus on that. But if you’re really interested in medicine, and you decide you’re going to become an Internet entrepreneur because it looks like everybody else is doing well, then that’s probably not going to work. You don’t choose your passions, your passions choose you. One of the reasons you saw so many companies that were formed in 1998 or 1999 fail is that they were chasing the wave. And that usually doesn’t work. Find that area that you are interested in and passionate about–and wait for the wave to find you.–

There was an article in the WSJ this morning about supporting loved ones when they find out they have cancer. I immediately had opinions on the article because I remember my own experience very clearly with my mom. I remember cleaning out my college apartment when she called me to give me the news, and I think my immediate reaction was somewhat selfish. I reacted in a way I thought was right for her, I put on the “you can do this, you can fight this,” hat. I was so absorbed in reassuring myself that I was completely unaware of what my mom needed at that moment. Now I certainly won’t beat myself up for that because it was a really difficult thing to go through, but I think the article brings awareness to an important issue: how to offer support in a way that works for the person with the difficult news, not in a way that works just for you.

From the WSJ article:

“Loved ones don’t know what to do, and they don’t want to make a terrible error,” says Marisa Weiss, an oncologist and founder of Breastcancer.org, a nonprofit organization. “This fear keeps people from doing anything.”

While that’s the worst mistake you can make, experts say, there are a number of other slip-ups. Well-meaning friends and family members often ask inappropriate questions, such as the patient’s prognosis. They offer theories on why their loved one got sick, give unsolicited advice or insist that “everything is going to be just fine.”

That was certainly the case for my mom. She chose to deal with cancer in a manner that shocked and maybe even frustrated a lot of people: She didn’t want to talk about it. She wanted to have life just go on, she wanted to more or less ignore its presence as much as possible. And she wanted everyone around her to do the same. She didn’t want to be a “sick person,” she just wanted to be her usual self. She didn’t want to go to support groups, she didn’t want to have people call her out of the blue to offer words of encouragement, she just wanted to feel normal. This approach included not fully knowing the details of her illness. She chose instead for the doctors to treat her as they saw fit, but to keep her in the dark. She not only wanted to feel normal, she wanted to maintain a very positive attitude. This really drove people crazy. Actually at times it even drove me crazy. “How can you not know what you’re up against,” some people would say. But that wasn’t their question to ask. It was my mom’s.

From my experience, the best advice:

In general, experts say, you should take your lead from the person who is sick. If she wants to talk about her illness, then listen. Don’t be afraid of emotions. “Being there, listening and being supportive is a powerful role,” Dr. Weiss says. “If the person feels comfortable crying in front of you, be honored, because you fulfilled a really important need.”

I broke that bit of advice many times. I once had a bunch of my mom’s friends send her letters of support. She was not happy about that to say the least. I missed what was most important to her in her fight…the feeling of normal. I struggled…how could she not want words of encouragement from so many that love her? Because normal life provided her the encouragement she wanted. Extra attention from others made her feel sick, more vulnerable. I didn’t understand then. I do now.

In retrospect I hold a tremendous amount of respect for my mom’s approach. It had to be SO hard to not know the details (especially for such an inquisitive person). The unknown is a scary thing, especially when it relates to your health. But there’s even more genius in her approach. Not just because it allowed her to stay positive, and not just because it empowered her mind to think she was healthier than she actually was, but because it was ultimately HER way of dealing with it. Not mine. Not Tom’s. Not her friends. Hers.

Dealing with bad news is hard enough, offer support to someone as they need it, not how you think you would.

Anyway, his 2007 letter is full of good info and I’d highly recommend you read it yourself. I’ve included some good bits of info and quotes below.

My favorite quote:

At 84 and 77, Charlie and I remain lucky beyond our dreams. We were born in America; had
terrific parents who saw that we got good educations; have enjoyed wonderful families and great health;
and came equipped with a “business” gene that allows us to prosper in a manner hugely disproportionate to
that experienced by many people who contribute as much or more to our society’s well-being. Moreover,
we have long had jobs that we love, in which we are helped in countless ways by talented and cheerful
associates. Every day is exciting to us; no wonder we tap-dance to work.

Others:

on protective moats:
A truly great business must have an enduring “moat” that protects excellent returns on invested
capital. The dynamics of capitalism guarantee that competitors will repeatedly assault any business
“castle” that is earning high returns. Therefore a formidable barrier such as a company’s being the low-
cost producer (GEICO, Costco) or possessing a powerful world-wide brand (Coca-Cola, Gillette, American
Express) is essential for sustained success. Business history is filled with “Roman Candles,” companies
whose moats proved illusory and were soon crossed.

Our criterion of “enduring” causes us to rule out companies in industries prone to rapid and
continuous change. Though capitalism’s “creative destruction” is highly beneficial for society, it precludes
investment certainty. A moat that must be continuously rebuilt will eventually be no moat at all.

Additionally, this criterion eliminates the business whose success depends on having a great
manager. Of course, a terrific CEO is a huge asset for any enterprise, and at Berkshire we have an
abundance of these managers. Their abilities have created billions of dollars of value that would never
have materialized if typical CEOs had been running their businesses.

But if a business requires a superstar to produce great results, the business itself cannot be deemed
great. A medical partnership led by your area’s premier brain surgeon may enjoy outsized and growing
earnings, but that tells little about its future. The partnership’s moat will go when the surgeon goes. You
can count, though, on the moat of the Mayo Clinic to endure, even though you can’t name its CEO.

***on reinvesting profits:
There’s no rule that you have to invest money where you’ve earned it. Indeed, it’s often a mistake to do so: Truly great businesses, earning huge returns on tangible assets, can’t for any extended period reinvest a large
portion of their earnings internally at high rates of return.

**capital stream
It’s far better to have an ever-increasing stream of earnings with virtually no
major capital requirements. Ask Microsoft or Google.

**worst sort of businesses:
The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.

** three types of businesses:
To sum up, think of three types of “savings accounts.” The great one pays an extraordinarily high
interest rate that will rise as the years pass. The good one pays an attractive rate of interest that will be
earned also on deposits that are added. Finally, the gruesome account both pays an inadequate interest rate
and requires you to keep adding money at those disappointing returns.
-I like option 1

***Admit and analyze your mistakes for future growth opportunities. Mistakes are part of success and they are a certainty: To date, Dexter is the worst deal that I’ve made. But I’ll make more mistakes in the future – you
can bet on that. A line from Bobby Bare’s country song explains what too often happens with acquisitions:
“I’ve never gone to bed with an ugly woman, but I’ve sure woke up with a few.”

***On hiring:An aside: Charlie and I are not big fans of resumes. Instead, we focus on brains, passion and integrity. Another of our great managers is Cathy Baron Tamraz, who has significantly increased
Business Wire’s earnings since we purchased it early in 2006. She is an owner’s dream. It is
positively dangerous to stand between Cathy and a business prospect. Cathy, it should be noted,
began her career as a cab driver.

***on investing
it is interesting that he doesn’t really care about the stock price of where the company is trading or where he bought it. He is actually concerned with his % ownership of the business and what the business is worth. He is not concerned about share price growth, but instead on company earnings growth (per share). How he evaluates them:
I should emphasize that we do not measure the progress of our investments by what their market
prices do during any given year. Rather, we evaluate their performance by the two methods we apply to the
businesses we own. The first test is improvement in earnings, with our making due allowance for industry
conditions. The second test, more subjective, is whether their “moats” – a metaphor for the superiorities they possess that make life difficult for their competitors – have widened during the year. All of the “big four” scored positively on that test.

***On US dollar:
The U.S. dollar weakened further in 2007 against major currencies, and it’s no mystery why:
Americans like buying products made elsewhere more than the rest of the world likes buying products
made in the U.S. Inevitably, that causes America to ship about $2 billion of IOUs and assets daily to the
rest of the world. And over time, that puts pressure on the dollar.

**currencies
At Berkshire we held only one direct currency position during 2007. That was in – hold your
breath – the Brazilian real.

**on expected returns
I should mention that people who expect to earn 10% annually from equities during this century –
envisioning that 2% of that will come from dividends and 8% from price appreciation – are implicitly
forecasting a level of about 24,000,000 on the Dow by 2100. If your adviser talks to you about double-
digit returns from equities, explain this math to him – not that it will faze him. Many helpers are apparently
direct descendants of the queen in Alice in Wonderland, who said: “Why, sometimes I’ve believed as many
as six impossible things before breakfast.” Beware the glib helper who fills your head with fantasies while
he fills his pockets with fees.

“IS THIS THE MOST POWERFUL MAN IN SPORTS?” Sounds like it after reading this GQ article. This is a highly entertaining article that shows power of proximity. Sometimes it’s more than what you do or what you’ve done, it’s who you know.

“70% of the nation’s big family fortunes are less than 13 years old” and “the people who amassed them are, first and foremost, entrepreneurs — risk takers for whom wealth is a byproduct of pursuing their passion.”